The Quality-Complementarity Hypothesis: Theory and Evidence from Colombia

We would like to thank, without implicating, Pol Antras, Abhijit Banerjee, Oeindrila Dube, Esther Duflo, Jonathan Eaton, Marcela Eslava, Garth Frazer, Andrew Foster, Penny Goldberg, John Haltiwanger, James Harrigan, Kate Ho, David Hummels, Amit Khandelwal, Wojciech Kopczuk, Adriana Kugler, David Lee, Marc Melitz, Nathan Nunn, Rohini Pande, Cristian Pop-Eleches, Esteban Rossi-Hansberg, Rafael Santos, John Sutton, Chad Syverson, Kensuke Teshima, Jim Tybout, Miguel Urquiola, David Weinstein and many seminar participants for helpful comments; Kensuke Teshima, Hitoshi Shigeoka and Juan Ovalle for excellent research assistance; and Juan Francisco Martinez, Luis Miguel Suarez, German Perez and Beatriz Ferreira of DANE for help with the plant data. Verhoogen thanks the Program for Economic Research at Columbia University for funding and the Center for Health and Well-Being at Princeton University and the Abdul Latif Jameel Poverty Action Lab at MIT for hospitality. An earlier version of this paper was circulated under the title, "Product Quality at the Plant Level: Plant Size, Exports, Output Prices and Input Prices in Colombia." The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.